Over the past few years, the South African Revenue Service
("SARS") appears to have created a new
category of doubtful debts allowances which they have termed a
"specific" doubtful debts allowance, as distinct from the
"ordinary" doubtful debts allowance to which a taxpayer
is entitled under section 11(j) of the Income Tax Act,
1962 (the "Act") in the ordinary course
in respect of its doubtful debts.
The "specific" doubtful debts allowance category has
been created by SARS for the purpose of replacing a taxpayer's
bad debt deduction (claimed under section 11(i) or (a) of
the Act) where SARS has taken the view that the pool of debtors in
respect of which a taxpayer claimed such a bad debt deduction is
not in fact bad, but merely doubtful. Regardless of effort expended
by any taxpayer in the collection process prior to the writing-off
of a debt as bad and the claiming of a section 11(i) or
(a) deduction in respect thereof, if any recovery
processes take place post
